Transcript Document
KBC Advanced Technologies plc Annual Results 31 December 2003 March 2004 Overview 2003 Difficult trading conditions persisted through most of the year exacerbated by the uncertainty created by the ownership discussions Core business remains in good shape Management team refreshed and have stabilised the business Staff morale improved significantly in final quarter Business being repositioned to improve the scope and depth of engagement with clients and improve service differentiation Progress on software development has been made - despite the continuing legal dispute £ results impacted by continuing weakness of $US Dividend maintained 2 Operational highlights 2003 Began to reap the benefits of the two acquisitions made in 2002 Combined KBC PEL revenue up 37% Energy Services was the best performing business in 2003 enabled KBC to enter the strategic planning market Significant new licence sales in US, Asia and South America and overall software revenue up 10% Expansion of RAM services into Upstream sector Weakness in Europe and China contrasted with better conditions in the Americas and Asia Latin America continues to be strongest market with further multi-year programmes added First PIP in South Africa Middle East, Korea and Japan continue to be strong areas of revenue 3 Summarised profit and loss account 12 months to 31 Dec 2003 £000 Turnover Operating profit Goodwill amortisation Other operating exceptional items Amounts written off fixed asset investment Net Interest Loss before tax Taxation Profit after tax Dividends Retained (loss)/profit Earnings per share - basic - fully diluted - basic before goodwill and exceptional items Average number of shares in issue 4 12 months to 31 Dec 2002 £000 32,274 704 (490) (2,397) 200 (1,983) 499 (1,484) (1,906) (3,390) 38,193 1,487 (467) (3,011) (1,451) 318 (3,124) 673 (2,451) (1,938) (4,389) (3.19p) (3.17p) (5.08p) (5.08p) 1.37p 46.5m 3.33p 48.2m Foreign exchange impact At 31Dec 2003 £000 At 31 Dec 2003 £000 at constant exchange rate At 31 Dec 2002 £000 Turnover 32,274 33,976 38,193 Operating costs 31,570 _____ 32,767 _____ 36,706 _____ 704 1,209 1,487 Operating profit before goodwill and exceptional items 5 Exceptional Costs 12 months to 31 Dec 2003 £000 12 months to 31 Dec 2002 £000 Software dispute, legal fees, etc Acquisition integration Reorganisation Strategic review ESOP share write down 1,325 878 194 ____- 1,565 399 1,047 1,451 Total 2,397 4,462 6 Summarised group cash flow statement 12 months to 31 Dec 2003 £000 Net cash from operations Operating exceptional items Net interest received Tax (paid)/refunded Capital expenditure Dividends paid Purchase of own shares New shares issued Translation difference Net cash outflow from acquisitions 7 12 months to 31 Dec 2002 £000 275 (1,846) 200 769 (257) (1,906) (173) (410) 1,257 (2,022) 318 (1,847) (799) (1,994) (683) 36 (123) (4,738) (3,348) (10,595) Summarised group balance sheet At 31 Dec At 31 Dec 2003 £000 2002 £000 Fixed assets Net current assets (excl cash) Cash Creditors due after 1 year Provisions Net assets 7,756 8,032 4,275 (300) (1,180) 18,583 9,288 7,356 7,623 (600) (1,100) 22,567 Share capital and reserves Profit and loss 7,466 11,117 7,466 15,101 18,583 22,567 8 Revenues by region 2003 12 mths - £m 2002 12 mths - £m 6.6 7.3 8.6 20% 27% 19% 53% 12.2 32% 49% 18.7 17 Europe/Middle East/Africa Americas Asia Europe/Middle East/Africa 2001 12 mnths - £m 7.7 20% 22% 58% 22.5 11.8 Europe/Middle East/Africa 9 Americas Asia Americas Asia Revenues by business area 14.5 13.3 12.4 12.0 12.1 9.0 8.0 7.2 6.2 6.2 5.3 5.0 1.9 Process Consulting H1'00 H2'00 2.4 5.5 2.8 1.7 2.1 2.2 Other Consulting H1'01 H2'01 10 H1'02 1.8 1.9 1.8 1.6 Software H2'02 H1'03 H2'03 2.2 Order book value 30 £ Millions 25 20 15 10 5 0 Dec-00 £35M Jun-01 £40M Dec-01 £28M Jun-02 within next 12 mths - base fees > 12 mths ahead - base fees 11 £29M Dec-02 £24M Jun-03 £20M Dec-03 within next 12 mths - fees @ risk > 12 mths ahead - fees @ risk £22M Consultant utilisation 90 80 74 73 75 72 70 74 65 60 50 % 40 30 20 10 0 H1 - 01 H2 - H1 - 01 12 02 H2 -0 2 H1 -0 3 H2 -0 3 Strategy Stabilise Business during 2004 Build platform for future sustainable growth Neutralise impact of software dispute Retain control on costs Implement Strategy for Growth for 2005 and beyond Strategic Planning Studies- Commercial and Technical experience New software tools for plant optimisation and decision support Develop technical services based on remote performance monitoring Worldwide drive into Petrochemical Expand into Upstream Oil & Gas Refocus on Client Relationships and Regional Business strategies Review capital structure & dividend policy:once software dispute settled 13